09 Jul 2019

Study on the accounting regime of limited liability micro companies

Final study

Willem Pieter De Groen / Cinzia Alcidi / Roberto Musmeci / Sara Baiocco / Matthias Busse / Karolien Lenaerts

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This is the study on the accounting regime of limited liability micro companies for the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA). The study consists of a quantitative and qualitative assessment of the application of the super simplified reporting regime for micro companies as defined in the new Accounting Directive (2013/34/EU). This study finds that the EU had, at the end of 2016, 16.8 million limited liability companies in the scope of the Directive. Among these companies are 14.2 million companies (84.4 %) that would be defined as micro companies according to the maximum criteria in the Directive and 11.7 million companies (69.7 %) according to the national size criteria in the 22 Member States that have implemented the super simplified regime. Based on the available information from a survey among micro companies and other stakeholders in eight EU Member States, we estimate the current one-off costs of familiarising with the new regime at EUR 27 million and the ongoing burden reduction at EUR 106 million per year. If size criteria were fully aligned with the Directive, the costs and benefits would be slightly higher. However, it clearly emerges that the extensive lack of awareness about the super simplified regime appears a far more important factor than the different thresholds adopted in national legislation. Under the assumption of full awareness among micro companies, the estimated costs and benefits would increase by almost a factor of ten to EUR 0.33 billion in one-off costs and EUR 1.29 billion in annual benefits from a reduced administrative burden.

This study is prepared by CEPS in collaboration with LSE Enterprise and Bureau van Dijk for the European Commission, Directorate-General for Financial Stability, Financial Services and Capital Markets Union. The information and views set out in this study are those of the authors and do not necessarily reflect the official opinion of the European Commission. The European Commission does not guarantee the accuracy of the data included in this study. Neither the European Commission nor any person acting on the European Commission’s behalf may be held responsible for the use which may be made of the information contained therein. The original paper and the executive summary are also available on the European Commission’s webpage. © European Union, 2019.

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